alstry (35.26)

Dollar CRASHING!!!!!!!!!!!!!!!!!

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The U.K.'s latest bank-rescue effort initially backfired Tuesday, helping drive its currency to historic lows while aggravating fears about the stability of the country's banks and the fate of the government's finances.

Rather than reassure markets, the giant new bailout plan announced Monday by Prime Minister Gordon Brown underscored the depth of the crisis faced in one of the world's largest financial centers.

The pound slid nearly 5% Tuesday to an all-time low against the yen, according to Morgan Stanley, and to a seven-year low against the dollar.

Soon you guys will learn.......especially TMF writers who have been forecasting the demise of the US Dollar.

Hard assets have always been the right place to be... for the greater part. Hard assets retain value as long as they are somewhat scarce. If there is too great a supply and not enough demand, the value goes down.

Stocks of profitable companies are a great place to be also, especially when a fiat money is tanking. Our fiat money is not, yet.

It looks like that time will come in the future. Maybe six months, maybe one year, maybe later. Maybe not for a long time. Very hard to predict.

alsty thank you. As for hard assetts I like sivler and gold. A house that I can garden around the house and put in canning from it. A solar panel or 2 for when the eletric goes and a camping toilet that bio degrades for when the sewer system goes. A way to collect water for when the water system goes and the most important is as in the days of the depression. Toilet paper. :-) As always you scare the begebers out of this hard working bookseller. Thanks for keeping me informed. LQ.

Yeah, the dollar has rallied during the turmoil, but we still don't know how much of that is driven by liquidation (because most contracts are denominated in dollars, the liquidation of a stock or bond or commodity drives up the demand for cash--in this case dollars). So, my best guess is that the dollar rally is driven by the market crash.

Plus, it's not exactly like the dollar is extremely strong. It just rallied off the low from back in July when it was $1.60/Euro. Now it's about $1.30/Euro. Back in 2002, I remember it being $0.85/Euro. Stayed in a pretty nice hotel in Paris back then for about $80/night.

I've got a pretty big pile of gold, simply because it seems to hold up better than anything else. I think it ended up 6% for 2008 (even if it was 20% off its April high). We'll see if it survives this year too.

Oh yeah, and those Brits are totally hosed with the pound where it is. Britain used to be really expensive, and they had loads of home equity they were using to buy more property on the continent, mostly in Spain and France.

Look at the typical British homeowner whose house was 250,000 pounds a year and a half ago, which was about 375,000 Euro. Now, the house is worth 200,000 pounds or less and only worth 215,000 Euro.

For those would be buyers on the continent, maybe their price fell by 20% in pounds, but it fell by more than 40% in Euro. I might just get that cheap apartment on the coast of Spain sooner than I thought!

The boost to the USD from the pound's pronounced weakness this week means absolutely nothing in the big picture. Certainly, nothing you have posted provides any sort of evidence of strength in the greenback. This is a giant global race to debase, and while our closest allies (like Britain and Japan) will take one for the team and shoot themselves in the foot by attempting to outpace the dollar's decline, in the end you will see that the dollar's decline and its resulting effective discontinuation as the reserve currency of the world will be the event which historians will write about for centuries.

The relative strength in the price of gold during this near-term dollar recovery from the precipitous decline seen last month is, in fact, solid evidence that the world does not see this USDX bump as a meaningful nor lasting event.

Gold is SCREAMING at me!!!!!! It was about $850 at the peak of the inflation scare in 1980 and it is about $850 today....AFTER some of the most impressive inflation in ANY 30 year period. If you want keep living in fantasy land, please don't let me stop you.

As far as the dollar's decline......I see NO EVIDENCE relative to the other currencies for the foreseeable future....if we are talking years out????...........than anything is possible.

At this point, all I KNOW is Alstrynomics is kicking Sinchi's backside in the game of CAPs......

That said, in no way does it mitigate that you are an exceptional blogger......you simply can't see the playing field clearly.